Segment Information

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Segment Information

Segment Information

We use the management approach to identify operating segments. We organize our business around differences in regulatory environment and/or products or services, and the operating results of each segment are regularly reviewed by the chief operating decision maker (our Chief Executive Officer) in order to make decisions about resources and to assess performance. The segments are evaluated based on their pre-tax operating income. Our operations comprise two reportable segments:

• Regulated Energy. The Regulated Energy segment includes natural gas distribution, natural gas transmission and electric distribution operations. All operations in this segment are regulated, as to their rates and services, by the PSC having jurisdiction in each operating territory or by the FERC in the case of Eastern Shore.

• Unregulated Energy. The Unregulated Energy segment includes propane distribution as well as natural gas marketing, gathering, processing, transportation and supply. These operations are unregulated as to their rates and services. Effective June 2016, this segment includes electricity and steam generation through Eight Flags' CHP plant. As of March 31, 2017, this segment also included the operations of Xeron, our former propane and crude oil trading subsidiary that began winding down operations during the quarter. Lastly, this segment also includes other unregulated energy services, such as energy-related merchandise sales and heating, ventilation and air conditioning, plumbing and electrical services.

Other operations are presented as “Other businesses and eliminations,” which consist of unregulated subsidiaries that own real estate leased to Chesapeake Utilities, as well as certain corporate costs not allocated to other operations.

The following table presents financial information about our reportable segments:

	Three Months Ended
	March 31,
	2017			2016
(in thousands)
Operating Revenues, Unaffiliated Customers
Regulated Energy segment	$	96,446		$	88,894
Unregulated Energy segment	88,714			57,402
Total operating revenues, unaffiliated customers	$	185,160		$	146,296
Intersegment Revenues (1)
Regulated Energy segment	$	1,208		$	322
Unregulated Energy segment	4,011			113
Other businesses	228			226
Total intersegment revenues	$	5,447		$	661
Operating Income
Regulated Energy segment	$	23,017		$	24,319
Unregulated Energy segment	11,530			11,936
Other businesses and eliminations	129			125
Total operating income	34,676			36,380
Other expense, net	(277		)	(34		)
Interest	2,739			2,650
Income before Income Taxes	31,660			33,696
Income taxes	12,516			13,329
Net Income	$	19,144		$	20,367

⁽¹⁾  All significant intersegment revenues are billed at market rates and have been eliminated from consolidated operating revenues.

(in thousands)	March 31, 2017		December 31, 2016
Identifiable Assets
Regulated Energy segment	$	1,000,265	$	986,752
Unregulated Energy segment	213,078		226,368
Other businesses and eliminations	24,968		16,099
Total identifiable assets	$	1,238,311	$	1,229,219

Our operations are entirely domestic.